MINING LEGISLATION.

Te Aroha News, Volume XIV, Issue 2096, 21 April 1898, Page 2

MINING LEGISLATION.

THE GOVERNMENT AND THE INTRODUCTION of CAPITAL.

WITHDRAWAL OF’ THR NEW ZEALAND EXPLORATION CO^

■ *• fv> ' 5 Our readers will regret to learn that the New Zealand Exploration Company has decided to withdraw from the colony in three months from date. It will be remembered that, the New Zealand Exploration Company were instrumental in capitalising the New Zealand Crown Mines Company, pay£so,ooo to the old shaieholders, and providing £50,000 working capital to the new Crown Company, which is now one of the principal bullion producers on the Hanraki Peninsula. The New Zealand Exploration Company ale© capitalised the Aroha Gold Mines, and they are driving a big tunnel on the Aroha property, at Waiorongomai, in the hope of cutting at a depth the huge system of reefs existing in that locality. It is also well known that they vigorously prospected, at a cost of thousands of pounds, a l the Kauri Timber Com jjany’s land outside the area held by the Kauri Freehold Gold Estates (Ltd) while they also proposed to find 1 capital to construct a railway from Paeroa to Waihi had not the Government intervened, and announced their intention of causing a survey to be made of the line. On the attempt of the Government to impose 5 per cent, tax on all profits instead of 5 percent, on half the dividends, as previously paid* the New Zealand Exploration Company cabled out to their manager to drop the Paeroa railway, and every other prospecting interest they had in New Zealand, and the decision now arrived at —|to withdraw altogether from the colony—is avowedly, dona to escape taxation. A Herald' reporter waited on Mr R. ,R. Hunt, the general meeting of the 1 New Zealand Exploration Company, and questioned him as to the exact reasons for the withdrawal of the company from this colony. ‘ Well, in the first place/ said Mr Hunt, * it would appear that New Zealand does not require outside capital to develop her mining resources—that is the conclusion one isforoed fco arriveat by the lack of given So, and the disabilities placed in the way of, capital for investment in mines. The first thing that caused a want of confidence in the Government, legislation (so far as it related to the mining and exploration companies) on the part of the directors of the New Zealand Exploration Company, was the attempt of the Government to resume possession of freeholds. To this the company were greatly opposed, and in this they were not alone, as there was a universal cry in London of condemnation at the proposed aotion of tho Government. But that question having been settled by legislation, inhere would have been no further ♦.rouble. There was, however, much disconteut at the time about the want of finality of the legislation—new miu- : ing Bills being introduced each session, to ths general upsetting of the minds of those who vreio ready to embark money in mining ventures in New Z »aland. Soon after the return of the Premier from London, an attempt was made to impose & per cent taxation on all profits, instead of 5 per cent on half the dividends as previously paid. This action caused a further want of confidence in the Government, and the company decided then not to find capital for the Paeroa-Waihi railway, and to drop another mining venture which had been settled to embark in. Then another objectionable thing was the imposition jof a tax on all profi made by the companies in England.’ - ‘Kindly explain this ’ ‘ The position was this: Tho balauce : sheet of the New Zealand Exploration • Company showed thatJoertam.- profits had been made in the Crown and : Aroha flotations, and by sale of their own shares at a premium. Well, that profit was made at Home, and no profit whatever has been made by the Exploration Company in the colony. But because the Exploration Company had the temerity to establish an offiee in the colony, the Income Tax Department has sought to oolleot a tax on profits made outside the colony, on which we have at the present time to pay the English income tax duties—practically asking us to pay a double tax, one at Home and one in New Zealand. Our argument is that had the New Zealand Exploration Company not opened an office in the colony the taxation should to be imposed could not be placed upon us. The Department still insist upon the pay-: ment of this taxation. This was really the ‘last straw,’ and the;company, taking everything into consideration, are of opinion that the Government are not anxious to encourage the introduction of capital into the colony, and decided to withdraw/ -- - :

‘ This step has been finally and irrevocably decided upon ?’ ‘Yes,’ said Mr Hunt, ‘ the company withdraw at the end of three months the time stipulated by law. It is a matter for regret that such a step has been decided upon, but in the face of the action of the Government, and the effect which legislation has had upon the introduction of into the colony, is it to be wondered at that companies should decide to withdraw from the colony, and turn their atten tion to other p!aces where capital is

welcomed ?’ . 3 , {/The withdrawal of - the N.Z. Ex ploration Co. does not necessarily mean the closing down of the Te Aroha and Crown workings. These prop jr ties, we take it, have been successfully floated by the Exploration Co., and •ire worked independently.—Eh.)